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China's solar power industry faces competition with newer technologies
By Fu Chenghao |
May 9, 2009, Saturday
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Print Edition
Print Edition
CHINA'S solar-cell production industry, the largest in the world, is facing some headwinds as newer technologies compete with more established methods of tapping the sun as a power source.
The challenges posed by price and efficiencies of competing technologies were evident this week at the SNEC PV Power Expo in Shanghai, as Shanghai Daily found out when talking to industry principals.
Eric Peeters, global executive director of Dow Corning Solar Solutions, said the solar market was going to be "really large" and many technologies would co-exist.
On one side are companies using newer thin-film technologies, which require larger upfront initial investment but utilize cheaper raw materials. On the other are users of the more traditional crystalline silicon-based technologies that underpin 90 percent of the industry. Polysilicon prices have been falling, upsetting the balance between the two rivals.
Price isn't the only factor driving the industry. There's also efficiency to consider.
The best thin-film technology in mass production has only about half the efficiency of crystalline silicon-based solar cells, which provide 17 percent to 23 percent sunlight conversion, according to a UBS report. That means a thin-film panel would need an area twice the size of a traditional solar panel to yield the same power output.
Shi Zhengrong, founder and chief executive of Suntech Power Holdings Co, which uses polysilicon technology, said thin film panels won't be competitive in terms of efficiency and may end up being another bubble bursting.
"I don't think it's competitive with efficiency at 6 to 8 percent now," said Shi, a scientist-turned-businessman. "They should at least reach 10 percent, which I fear is unrealistic for most."
Chinese thin film-based players, such as ENN Solar Energy Co and Baoding Tianwei SolarFilms Co, defended their technology at the exhibition.
They expressed confidence that their technology has a bigger role to play in the solar-cell industry and that the efficiency of their product could reach 10 percent in two years or three years.
Rick Wan, general manager of Langfang, Hebei Province-based ENN Solar, said thin film and polysilicon each had advantages.
"Crystalline-based cells are good for rooftops because they don't occupy large spaces, while cheaper thin film is more competitive in large scale utilities as well as building integrated projects as it can be designed as see-through type," Wan said. Aside from being cheaper, thin-film products work better than silicon-based panels in areas that are very hot, such as the desert, and in weak light environments.
Dow Corning Corp, the global silicon-based technology specialist that supplies polysilicon to crystalline-based cells, announced last December it would begin manufacturing high purity monosilane, a key specialty gas used in the production of thin-film cells.
Since the key issue of solar power lies in the cost of electricity generation, the costs of installation, operation and maintenance loom large alongside solar cell efficiency and the ability to capture energy.
Sha Xiaolin, chairman of QS Solar, which uses thin-film technology, said he won't consider technology upgrades that will help improve efficiency but significantly add to costs.
"Cost rules, not efficiency," he said.
QS Solar has announced its products could reach grid parity - the price at which solar power becomes competitive with coal-fired electricity - within three years with improvements in production scale and technology.
In Shanghai, where local government officials have recently completed a study on the city's solar power industry, thin film may emerge as a key industry on the municipal development agenda.
"Thin film makes more sense than polysilicon for Shanghai because you have the application market and more importantly, the city's mature semiconductor industry," said Sun Haiyan, China head of Oerlikon Solar, a Swiss company that offers equipment and end-to-end manufacturing lines for the production of thin-film silicon solar modules.
Oerlikon Solar announced on Wednesday in Shanghai that it passed all tests for its micromorph thin-film solar photovoltaic modules by German certification agency TUV Rheinland, which enables customers to reduce their time to market from six months to less than six weeks.
The micromorph process could improve solar cell efficiency by up to 50 percent and increases overall module power, the company said. Certification is crucial for solar cell makers wanting to export the majority of their products. "It wasn't possible for the government to consider thin film back in 2005, but now the technology is much better known," Sun said.
Still, financing could be a challenge for thin-film companies amid the global credit crunch. QS Solar's Sha said last month that his company hadn't secured any bank loans to fund expansion and a planned initial public offering in the United States has been postponed.
"Lenders are still uncertain about thin film and are not willing to lend to a private firm like us," he said. The company plans to expand annual production to 500 megawatts by the end of next year from 100MW at present.
The challenges posed by price and efficiencies of competing technologies were evident this week at the SNEC PV Power Expo in Shanghai, as Shanghai Daily found out when talking to industry principals.
Eric Peeters, global executive director of Dow Corning Solar Solutions, said the solar market was going to be "really large" and many technologies would co-exist.
On one side are companies using newer thin-film technologies, which require larger upfront initial investment but utilize cheaper raw materials. On the other are users of the more traditional crystalline silicon-based technologies that underpin 90 percent of the industry. Polysilicon prices have been falling, upsetting the balance between the two rivals.
Price isn't the only factor driving the industry. There's also efficiency to consider.
The best thin-film technology in mass production has only about half the efficiency of crystalline silicon-based solar cells, which provide 17 percent to 23 percent sunlight conversion, according to a UBS report. That means a thin-film panel would need an area twice the size of a traditional solar panel to yield the same power output.
Shi Zhengrong, founder and chief executive of Suntech Power Holdings Co, which uses polysilicon technology, said thin film panels won't be competitive in terms of efficiency and may end up being another bubble bursting.
"I don't think it's competitive with efficiency at 6 to 8 percent now," said Shi, a scientist-turned-businessman. "They should at least reach 10 percent, which I fear is unrealistic for most."
Chinese thin film-based players, such as ENN Solar Energy Co and Baoding Tianwei SolarFilms Co, defended their technology at the exhibition.
They expressed confidence that their technology has a bigger role to play in the solar-cell industry and that the efficiency of their product could reach 10 percent in two years or three years.
Rick Wan, general manager of Langfang, Hebei Province-based ENN Solar, said thin film and polysilicon each had advantages.
"Crystalline-based cells are good for rooftops because they don't occupy large spaces, while cheaper thin film is more competitive in large scale utilities as well as building integrated projects as it can be designed as see-through type," Wan said. Aside from being cheaper, thin-film products work better than silicon-based panels in areas that are very hot, such as the desert, and in weak light environments.
Dow Corning Corp, the global silicon-based technology specialist that supplies polysilicon to crystalline-based cells, announced last December it would begin manufacturing high purity monosilane, a key specialty gas used in the production of thin-film cells.
Since the key issue of solar power lies in the cost of electricity generation, the costs of installation, operation and maintenance loom large alongside solar cell efficiency and the ability to capture energy.
Sha Xiaolin, chairman of QS Solar, which uses thin-film technology, said he won't consider technology upgrades that will help improve efficiency but significantly add to costs.
"Cost rules, not efficiency," he said.
QS Solar has announced its products could reach grid parity - the price at which solar power becomes competitive with coal-fired electricity - within three years with improvements in production scale and technology.
In Shanghai, where local government officials have recently completed a study on the city's solar power industry, thin film may emerge as a key industry on the municipal development agenda.
"Thin film makes more sense than polysilicon for Shanghai because you have the application market and more importantly, the city's mature semiconductor industry," said Sun Haiyan, China head of Oerlikon Solar, a Swiss company that offers equipment and end-to-end manufacturing lines for the production of thin-film silicon solar modules.
Oerlikon Solar announced on Wednesday in Shanghai that it passed all tests for its micromorph thin-film solar photovoltaic modules by German certification agency TUV Rheinland, which enables customers to reduce their time to market from six months to less than six weeks.
The micromorph process could improve solar cell efficiency by up to 50 percent and increases overall module power, the company said. Certification is crucial for solar cell makers wanting to export the majority of their products. "It wasn't possible for the government to consider thin film back in 2005, but now the technology is much better known," Sun said.
Still, financing could be a challenge for thin-film companies amid the global credit crunch. QS Solar's Sha said last month that his company hadn't secured any bank loans to fund expansion and a planned initial public offering in the United States has been postponed.
"Lenders are still uncertain about thin film and are not willing to lend to a private firm like us," he said. The company plans to expand annual production to 500 megawatts by the end of next year from 100MW at present.
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